ABC company is under contract to make 10,000 blenders. It must decide whether to make or buy the blender motor. Unfortunately, ABC does not presently have motor technology. Motor development is a two-stage process. The first stage has an 80% chance of success and will cost $30,000. The second stage has a 60% chance of success and will cost $20,000. If development is successful, then the variable cost of producing a motor will be $2.50/motor. If either development stage is unsuccessful, ABC must purchase motors outside at a cost of $10/motor. Part 1: Draw a decision tree and use it to answer this question: 

Should ABC purchase the motor outside or begin development? (4 points) 

What is the most ABC would pay to know, before making the first decision, whether the second stage would succeed (assume that you can resolve the uncertainty about the second stage without resolving the uncertainty about the first stage)?